Andreas Halvorsen Takes Large Stake in Axovant Sciences

Guru sees value in biotech company

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Sydnee Gatewood
Dec 21, 2018
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Viking Global Investors leader

Andreas Halvorsen (Trades, Portfolio) disclosed an 81.2% stake in Axovant Sciences Ltd. (AXON, Financial) on Dec. 18.

The guru’s Greenwich, Connecticut-based firm picks stocks based on its understanding of the business’ fundamentals, management team and cyclical and secular industry trends.

According to GuruFocus real-time picks, Halvorsen invested in 99.3 million shares of the London-based clinical-stage pharmaceutical company for an average price of $1.06 per share. The stake was given 0.58% space in the equity portfolio.

The company, which develops small molecule drugs to treat neurological disorders, has a $127.79 million market cap; its shares were trading around $1.05 on Friday with a price-book ratio of 6.44.

The chart shows the stock is trading close to its median price-book value.

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On Dec. 14, the company announced a public offering of 30 million shares for $1 per share. Underwriters were granted a 30-day option to purchase up to an additional 4.5 million shares.

Axovant reported second-quarter earnings on Nov. 7, posting $21.5 million in research and development expenses and $10.6 million in general and administrative expenses. The net loss for the quarter was $33.8 million, or 28 cents per share.

The biotechnology company also recorded it had $90.7 million in cash, $47.4 million in working capital and $33.3 million in long-term debt as of Sept. 30.

Axovant’s financial strength and profitability and growth were both rated 5 out of 10 by GuruFocus. While the company’s cash-debt ratio of 1.70 suggests it is able to cover its debt load, the Altman Z-Score of -12.31 warns it is at risk of going bankrupt. In addition, the company’s margins and returns are negative and underperform a majority of industry competitors. It also has a low Piotroski F-Score of 3, which indicates poor operating conditions.

Halvorsen is, by far, the company’s largest guru shareholder.

Jim Simons (Trades, Portfolio)’ Renaissance Technologies and PRIMECAP Management (Trades, Portfolio) also own the stock.

Portfolio composition

Halvorsen’s $18.06 billion portfolio, which is composed of 64 stocks, is largely invested in the consumer cyclical and health care sectors.

Other biotechnology companies he owns as of the third quarter are Blueprint Medicines Corp. (

BPMC, Financial), Biomarin Pharmaceutical Inc. (BMRN, Financial), AnaptysBio Inc. (ANAB, Financial), Jazz Pharmaceuticals PLC (JAZZ, Financial), Editas Medicine Inc. (EDIT, Financial), Eidos Therapeutics Inc. (EIDX, Financial), aTyr Pharma Inc. (LIFE, Financial), Deciphera Pharmaceuticals Inc. (DCPH, Financial) and Abeona Therapeutics Inc. (ABEO, Financial).

Disclosure: No positions.

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